Mukesh Ambani, chairman of Reliance Industries Ltd, India’s largest private company, today laid down a road map for business transformation and value creation for the company at its 35th annual general meeting.
It includes attaining global scale for its conventional energy platform, developing a new breed of business, piloting alternative energy projects, value creation in services, especially organised retailing, and rural transformation by linking farmers in rural areas to urban and export markets.
Ambani said the company has lined up aggressive plans for oil and gas exploration work over the next three years, as it seeks to further strengthen its position in the energy business. It would include overseas acquisition. Reliance was working on developing nine gas fields around the Dhirubhai-1 and -3 gas discoveries, currently producing around 45 million standard cubic meters per day (mscmd) or 40 per cent of India’s total gas output. “Initial field development planning for accelerated monetisation of nine more gas discoveries in this block is underway,” Ambani added.
The company is also planning a new petrochemical complex at Jamnagar in Gujarat, with an annual capacity of two million tonnes of olefins and matching downstream capacities increasing the total capacity to four million tonnes.
Reliance began pumping gas from its find in the Krishna-Godavari basin off India’s east coast in April. “Gas production has crossed six billion cubic metres and the field is slated to plateau production by the second half of 2010. This production is from just three of the 19 discoveries in the area,” he said.
The Krishna-Godavari basin’s D6 block began oil production in September last year and is currently producing between 10,500 and 11,000 barrels of oil per day from three wells. Three more wells are to be added to more than double the output. “Oil production from the D26 (MA) field has been 2.8 million barrels (since production started) with daily peak production expected by the end of the year,” Ambani told the shareholders.
On November 10, RIL announced it had made its first oil discovery in the Cambay basin, Gujarat. “Reliance will continue to accrue oil and gas properties overseas to add to existing assets in Oman, Yemen, Colombia, East Timor and Peru,” Ambani added.
Reliance has a current cash balance of Rs 19,400 crore and its net debt is now at less than 21 months of cash flow, Ambani said.
As part of its corporate social responsibility intiative, he announced that the company would be setting up a Rs 500-crore Reliance Foundation to address the social development imperatives of the country. The corpus would be later increased to Rs 1,000 crore and would provide formal and vocational education, high-quality healthcare, rural development and urban renewal, and protection and promotion of India’s heritage of arts and culture.
